PatrickPretty.com

Tag: Iowa Public Employees Retirement System

  • More Pension Funds Frozen In Westridge Capital Management Case; San Diego County Was Pulling Out Of Fund As University of Pittsburgh Was Increasing Stake

    Paul Greenwood.
    Paul Greenwood.

    Westridge Capital Management (WCM) and affiliate WG Trading appear to have been trolling for cash to sustain the deception until the bitter end. Even as one public retirement system was pulling out and demanding a return of invested funds, another one was increasing its stake.

    In January, just weeks before the firms were exposed as frauds, they asked the San Diego County Employees Retirement Association (SDCERA) to change its mind about pulling out,  SDCERA said.

    SDCERA said its fears were heightened in October 2008 when an analyst from Albourne Partners, an SDCERA consultant, “found [Paul] Greenwood to be uncooperative and evasive” during a due-diligence examination. The association had about $78 million in the fund, after having taken a $75 million redemption in October 2007.

    Greenwood and Stephen Walsh, two principals in the firms, were arrested by the FBI last week. They are accused of orchestrating a fraud involving hundreds of millions of dollars.

    “In addition to a general lack of operational transparency, Greenwood [in October 2008] refused to provide access to key references such as third party brokers,” SDCERA said. “SDCERA also followed up with WG Trading by requesting additional information, but was not provided with a sufficient response.”

    The association ended its contract with WG Trading on Dec. 31, 2008. Within days, WG Trading asked it to reconsider — after its earlier refusal to disclose information.

    “On January 8, 2009, WG Trading contacted SDCERA and requested their termination be reconsidered and offered to provide additional information, which SDCERA deemed insufficient,” SDCERA said.  “On January 15, 2009, the SDCERA Board of Trustees rejected WG Trading’s request to be reinstated, and approved staff’s decision to terminate WG Trading and demand a return of all monies invested.”

    SDCERA said it did not suspect fraud at the time, which might not be good news to the University of Pittsburgh. Only weeks after SDCERA’s termination, Pitt increased its stake in WCM by more than $21 million.

    More WCM Fallout

    More than $135 million in pension funds for North Dakota public retirees have been frozen as a result of the WCM fraud probe.

    The North Dakota State Investment Board has terminated its investment management relationship with WCM and WG Trading.

    Last week, the Iowa Public Employees’ Retirement System ended its contract with WCM. Iowa public retirees have $339 million at risk in the fund. The University of Pittsburgh and Carnegie Mellon University, with a combined $114 million in the fund, also have exposure. So does the SDCERA, which may have $78 million in exposure. The Sacramento County Employees’ Retirement System also has exposure.

  • BREAKING NEWS: Another Major Probe Imminent Amid Extraordinary Assertion That Fund Managers Took Hundreds Of Millions Of Higher-Education Client Dollars And Left IOUs

    UPDATE 10:55 P.M. EST (Feb. 22, U.S.A.) We’ve added to the bottom of this post some information about Westridge Capital’s website, which appears to consist of a single page and is amateur by any modern standard. We’ve also associated a second domain to the company.  It, too, appears to consist of a single page — a page that appears to be just a holding page from the company’s hosting provider.

    We’ve also added some links to public employee retirement funds that list Westridge Capital Management in their financial reports.

    Here, below, our earlier post . . .

    It could be the maximum case of brains getting drained by fraudulent investment advisers.

    Two universities in Pennsylvania known for producing top thinkers in computer science and medicine fear they have lost at least $114 million in an investment swindle and have filed an emergency lawsuit to recover the money.

    Because the investment fund in question has as many as 16 participants, including university foundations and retirement and pension plans — and perhaps $1.8 billion or more under management — the losses could be enormous.

    Carnegie Mellon University and the University of Pittsburgh seek the immediate return of money they invested with Westridge Capital Management (WCM) of Santa Barbara, Calif. Also named in the complaint are company principals and various affiliates, including WG Trading Investors LP of Greenwich, Conn.

    The universites said they contacted the Securities and Exchange Commission and the Commodity Futures Trading Commission this week and requested an emergency investigation. Attorneys for the universities filed a lawsuit in U.S. District Court for the Western District of Pennsylvania.

    In an extraordinary assertion made after a panicked trip Monday by a university administrator to New York, New Jersey and Connecticut to speak with WCM executives, CMU and Pitt said the money might have been “converted” and IOUs left in its place.

    “The Defendants named herein have converted investor funds to their own use,” the universities charged.

    Lawsuit claims managers left IOUs for hundreds of millions of dollars.
    Lawsuit claims managers left IOUs for hundreds of millions of dollars.

    Two of WCM’s principals — Paul Greenwood and Stephen Walsh — were suspended by the National Futures Association (NFA) last week in a little-publicized emergency action.

    The universities, in their lawsuit, said “personal promissory notes” for “hundreds of millions of dollars” from Greenwood and Walsh made payable to WG Trading Investors were uncovered in an NFA audit last week.

    Greenwood and Walsh control WG Trading Investors, also known as WGTI.

    NFA said Greenwood and Walsh stonewalled and refused to participate in the audit in any material way.  One of the excuses Walsh used, despite the obvious importance of the audit, was that he “would be in a meeting all day” and unavailable to speak with NFA, the universities said in the lawsuit.

    Greenwood and Walsh are sole proprietor Commodity Pool Operator (CPO) Members of NFA in Greenwich, NFA said.

    “Additionally,” NFA said, “Greenwood and Walsh have failed and refused to respond to NFA’s inquiries regarding numerous promissory notes totaling hundreds of millions of dollars executed by them individually in favor of an investment vehicle to which two NFA listed commodity pools have loaned a total of over half a billion dollars.”

    Read the CMU/Pitt lawsuit against Westridge Capital Management, WG Trading Co. Limited Partnership,Westridge Capital Management Enhanced Funds Inc., WG Trading Investors LP, Paul Greenwood, Stephen Walsh, Jack Eldred Reynolds, James Carder and Deborah Duffy.

    Read about NFA’s emergency suspension of Greenwood and Walsh.

    Updates: We typed Westridge Capital Management’s street address as listed in the lawsuit into Google. Several businesses are listed at the same address — 222 E Carrillo St, Santa Barbara, Calif. 93101. The busineses list “suite” numbers. Westridge Capital’s suite number is 300.

    Westridge Capital’s URL is:

    http://westridgecap.com

    Its site basically is a blue page that lists only Westridge Capital’s name, Santa Barbara street address, phone and fax numbers, and an email address. There is no content on the landing page beyond that.

    We associated a second domain using registration data for the westridgecap.com domain. Here is the second domain:

    http://wgtrading.com

    The wgtrading.com domain resolves to a holding page that says:

    “Welcome wgi6 to Your New Virtual Private Server !

    “We would like to welcome you to your new Virtual Private Server. We are committed to bringing you the best service and finest Internet hosting solutions available. To help you get acquainted with your Virtual Private Server we have prepared “Getting Started” pages on our Web site. We encourage you to visit these pages and add them to your list of bookmarks.

    “Best wishes in using your new Virtual Private Server!”

    The wgtrading.com domain has been registered since July 12, 2000, when Bill Clinton was president. Meanwhile, the westridgecap.com domain has been registered since Oct. 22, 2003.

    Update: Here is a pdf from the Iowa Public Employees Retirement System that references WCM.

    Here is one from the Commonwealth of Pennsylvania Public School Employees Retirement System.

    Here is one from the North Dakota Retirement and Investment Office.